Bank of Baroda sees Growth in Bad loans slowing

Bank of Baroda Ltd, India's second-biggest state-controlled lender by assets, expects the rate of growth in bad loans to slow in the coming financial year, a senior banker said on Tuesday. Ashok Garg, an executive director, said the Bank of Baroda expects gross non-performing loans to total about 450 billion rupees ($6.7 billion) in the current year ending in March. 

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That would put the bank within the 50 billion rupees rise in bad loans that it had forecast for the current year, Garg said, adding that incremental bad loans in the next fiscal year would fall below these levels. 

"We are hopeful next year should be a bit better," Garg told Reuters, referring to slippages or additional bad loans. He said the bank had strengthened its credit monitoring and recovery processes and had a "strong" team on the ground chasing errant borrowers. 

Altogether, Indian banks had a record $133 billion of restructured debt and bad loans as of last September, according to the Reserve Bank of India. The amount of soured loans surged last year after a clean-up order by the regulator brought more bad debt to light.